Interferometric crosstalk, arising from the detection of undesired signals at the same nominal wavelength, may introduce large power penalties and bit-error rate (BER) floor significantly restricting the scalability of optical networks, In this paper, interferometric crosstalk reduction in optical wavelength-division-multiplexing (WDM) networks by phase scrambling is theoretically and experimentally investigated. Enhancement of 7- and 5-dB tolerance toward crosstalk is measured in a 2.5-Gb/s transmission link of 100 km and 200 km of SSMF, respectively. This result proves the feasibility of optical networking in the local area network/metropolitan area network (LAN/MAN) domain while tolerating the relatively high crosstalk levels of present integrated optical switching and cross-connect technology. Experiment is in good agreement with theory. Recommendations on the use of phase scrambling to reduce crosstalk in WDM systems are given.